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“Q3 represented a tough transitional quarter for our smart devices business as we introduced consumers for the innovation ahead with the new line of Lumia products,” Elop said.

Nokia, formerly the world’s top cellphone maker, had hoped to stem the decline in smartphones through the partnership with Microsoft Corp. but North America _ the frontline of the smartphone market _ continued to be a disappointment for its net sales and volumes further dropped by more than 50 percent in the region in the quarter.

Not only has it lost out in the fierce top-end race, it is now also losing ground to Asian makers in lower-end devices and phones using Google’s popular Android platform.

Samsung overtook Nokia as the world’s No. 1 cellphone maker in the first quarter, selling 86.6 million cellphones against Nokia’s 83 million. Nokia had led the field for 14 years with global market share peaking at 40 percent in 2008.

Nokia has announced more than 10,000 layoffs this year in an attempt to reduce operating expenses by (EURO)1 billion by 2013, and has said that it will continue with more cutbacks to make the company profitable again.

The company, based in Espoo, near Helsinki, employs 105,300 _ down 23 percent from a year ago.